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A comment on Ask HN: Why don’t companies offer a strike price of $0.01 on options?. Parent comment

Re:Ask HN: Why don’t companies offer a strike price of $0.01... by erikpukinskis on Monday September 26, 2022 @07:08PM (#32989811)
> If the stock is valued at $10 and the strike price is $0.01, the option is currently worth $9.99.

Right, but isn’t that a good thing? Then the employee gets some actual compensation, versus having to pay money for something that may have no value at all.

> Issuing an option with a low strike price would be better handled by issuing shares

Maybe that’s my real question then… why doesn’t every company issue shares? It would seem way more appealing to me.

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Re:Ask HN: Why don’t companies offer a strike price of $0.01... by bombcar on Monday September 26, 2022 @09:02PM (#32990557)
Because most of these are issued when they’re completely unsellable.

If they give you options and then go belly up you’re out nothing.

If they give you $100k of shares (based on whatever last funding round) you now owe tax on that, and may not be able to write it off when it goes to zero until some time passes, and may never recover the tax if you never have enough capital gains to offset.

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